On June 21, 2022, President Biden signed into law the “Bankruptcy Threshold Adjustment and Technical Corrections Act.” This is good news for small businesses seeking relief in sub-chapter V Chapter 11 cases and individuals seeking relief in chapter 13 cases.
For at least the next two years*, the debt limit for Sub Chapter V cases increases from $2.725 million to $7.5 million. The debt limit for chapter 13 rises to an aggregate of $2.75 million, regardless of whether the debt is secured or unsecured. It amends and substantially increases the previous separate debt ceilings that applied for secured ($1,395,875) and unsecured ($465,275) debt in chapter 13.
This increased debt limit expands the availability of these remedies to small businesses and individuals experiencing financial problems.
* Unless extended by further legislation, all provisions of the law will sunset two years from enactment, on June 21, 2024.
Contact Lipson Neilson bankruptcy attorney Mike Lieberman to find out more about this new law.
248-593-5000